European Inflation at current 0.9 trades between the German 10 and 20-year yield from 0.67 to 0.944, above the Deposit rate at 0.50 and above Eonia, the overnight rate at 0.52. Inflation trades above 12 month Euribor at 0.51.
At Inflation’s release yesterday, EUR/USD was located at a significant 1.1887 but overall to the day trade, EURUSD was in a dead neutral position. No trade was available for CPI.
EUR/USD’s option upon release was the next highest and lowest points at 1.1894 and 1.1879. After the release, EUR/USD traded 1.1894 to 1.1881 or 13 pips but 7 pips above 1.1887 and 8 pips above 1.1879.
As accurately stated, pay no attention to CPI. From 1.1887, EUR/USD required a severe miss to CPI in order for a trade to exist. From consensus at 1.7 and last at 1.4 or 0.3, a CPI miss to forecast was nearly impossible.
Europe reports Inflation tomorrow and again don’t bother as 0.9 current Inflation is locked in place between many significant points as highlighted above. Not only CPI locked in place but the main question is CPI overbought or oversold. Rarely if ever is CPI overbought or oversold in any nation.
The true movers to releases are economic such as GDP, Industrial Production, Retail Sales, Inventories, Trade Balance. EUR/USD is actually an interest rate but it’s also most specifically an economic document. Economics and interest are synonymous and move in combination to each other and both assist to correctly price EUR/USD.
Today is ECB and the EUR/USD is located in a trap situation as the same trade exists for today’s day trade as was forecast through the Asian session. We’re dealing with the same levels, targets and already 7 hours from Asia and 5 hours remain.
The Day Trade
1.1862, 1.1869, 1.1874, 1.1877, 1.1884, 1.1889, 1.1997, 1.1905, 1.1913
1.1929, 1.1937, 1.1944, 1.1952, 1.1969, 1.1967, 1.1974, 1.1982
EUR/USD trades at day’s highs, short is the only trade.